5. If corporate profits are so high, how is this consistent with the persistently low demand postulated by Summers’ “secular stagnation” hypothesis?
Secular stagnation as we think of it is the product of a rising gap between the desire to save and the desire to invest (which, in an IS-LM type framework, would push down the neutral real interest rate). Falling worker power redistributes income from lower and middle-income people to the rich. The rich have a higher propensity to save. Thus, falling worker power increases the desire to save relative to the desire to invest. Rising inequality has been posited by several authors as a contributor to the declining neutral real interest rate (see e.g. Smith and Rachel 2015). Under this view, secular stagnation is exemplified by low private return to capital investment – but, in a noncompetitive world, this may or may not be the same thing as an abnormally low profit rate or capital share.
There is much more at the link, and on other issues as well. I would say I found the whole paper and discussion very clarifying.
While we are on the topic, here is a new paper by Stansbury (with Schubert and Taska) on monopsony. I haven’t read through it, but just based on the description of what they did it seems to get closer to finding the truth than the other works I have seen in this area:
Abstract: In imperfectly competitive labor markets, the value of workers’ outside option matters for their wage. But which jobs comprise workers’ outside option, and to what extent do they matter? We the effect of workers’ outside options on wages in the U.S, splitting outside options into two components: within-occupation options, proxied by employer concentration, and outside-occupation options, identified using new occupational mobility data. Using a new instrument for employer concentration, based on differential local exposure to national firm-level trends, we find that moving from the 75th to the 95th percentile of employer concentration (across workers) reduces wages by 5%. Differential employer concentration can explain 21% of the interquartile wage variation within a given occupation across cities. In addition, we use a shift-share instrument to identify the wage effect of local outside-occupation options: differential availability of outside-occupation options can explain a further 13% of within-occupation wage variation across cities. Moreover, the two interact: the effect of concentration on wages is three times as high for occupations with the lowest outward mobility as for those with the highest. Our results imply that (1) employer concentration matters for wages for a large minority of workers, (2) wages are relatively sensitive to the outside option value of moving to other local jobs, and (3) failure to consider the role of outside-occupation options in the concentration-wage relationship leads to bias and obscures important heterogeneity. Interpreted through the lens of a Nash bargaining model, our results imply that a $1 increase in the value of outside options leads to $0.24-$0.37 higher wages.
It also would be interesting to see what these parameter values imply for the effects of minimum wage hikes.
That is the new book by Stephanie Kelton and the subtitle is Modern Monetary Theory and the Birth of the People’s Economy. Here are a few observations:
1. Much of it is quite unobjectionable and well-known, dating back to the Bullionist debates or earlier yet. Yet regularly it flies off the handle and makes unsupported macroeconomic assertions.
2. Like many of the Austrians, Kelton likes to insist on special terms, such as the government spending “coming first.” You don’t have to say this is wrong, just keep your eye on the ball and don’t let it distract you.
3. “MMT has emphasized that rising interest income can serve as a potential form of fiscal stimulus.” You don’t have to believe in a naive form of Say’s Law, but discussions of demand should start with the notion of production. Then…never reason from an interest rate change! Overall, I sense Kelton has one core model of the macroeconomy, with a whole host of variables held fixed (“well…higher interest rates means printing up more money to pay for them and thus greater stimulus…”), and then applies that model to a whole series of quite general problems and questions.
4. She thinks “demand” simply puts resources to work, and in this sense the book is a nice reductio ad absurdum of the economics one increasingly sees from mainstream writers on Twitter. p.s.: The economy doesn’t have a “speed limit.” And it shouldn’t be modeled using analogies with buckets.
5. We are told that the U.S. “…can’t lose control of its interest rate”, but real and nominal interest rates are not distinguished with care in these discussions. The Fed’s ability to control real rates is fairly limited, though not zero, and those are empirical truths never countered or even confronted in this book.
6. The absence of a nominal budget constraint is confused repeatedly with the absence of a real budget constraint. That is one of the major errors in this book.
7. It still would be very useful if the MMT people would take a mainstream macro model and spell out which assumptions they wish to make different, and then solve for the properties of the new model. There is a reason why they won’t do that.
8. I don’t care what the author says or how canonical she is as a source, a federal jobs guarantee is not part of MMT.
9. Just because the economy is not at absolute full unemployment, it does not mean that free resources are on the table for the taking. Again, in this regard Kelton is a useful reductio on a lot of “Twitter macro.”
10. I am plenty well read in the “money cranks” of earlier times, including Soddy, Foster, Catchings, Kitson, Proudhon, Tucker, and many more. They got a lot of things right, but they also failed to produce coherent macro theories. I would strongly recommend that Kelton undertake a close study of their failings.
11. For all the criticisms of the quantity theory, I would like to know how the MMT people explain the Fed coming pretty close to its inflation rate target for many years in a row, under highly varying conditions, fiscal conditions too.
12. The real grain of truth here is that if monetary policy is otherwise too deflationary, monetizing parts or all of the budget deficit is not only possible, it is desirable. Absolutely, but don’t then let somebody talk loops around you.
You can order the book here.
Or a partial such allocation, at least. Here is my latest Bloomberg column:
The renowned economist Erik Brynjolfsson recently asked: “At least so far, I haven’t seen any one suggesting to use the market system to allocate vaccines. Not even those who strongly advocate it in other areas. Why is that?”
As one of several people copied at the bottom of the tweet, I feel compelled to take up the challenge.
I readily admit that a significant portion of the vaccines, when they come, should be allocated by non-market forces to health care workers, “front line” workers, servicemen on aircraft carriers, and so on. Yet still there is room for market allocation, especially since multiple vaccines are a real possibility:
If you had to choose among those vaccines, wouldn’t it make sense to look for guidance from market prices? They will reflect information about the perceived value of both protection and risk. On the same principle, if you need brain surgery, you would certainly want to know what the brain surgeon charges, although of course that should not be the only factor in your decision.
The market prices for vaccines could be useful for other purposes as well. If scientific resources need to be allocated to improve vaccines or particular vaccine approaches, for instance, market prices might be useful signals.
Note also that the scope of the market might expand over time. In the early days of vaccine distribution, health-care workers will be a priority. Eventually, however, most of them will have access to vaccines. Selling off remaining vaccine doses might do more to encourage additional production than would bureaucratic allocation at a lower price.
Say China gets a vaccine first — how about a vaccine vacation in a nearby Asian locale (Singapore? Vietnam?) for 30k? Unless you think that should be illegal, you favor some form of a market in vaccines.
In any case, there is much more at the link. Overall I found it striking how few people took up Erik’s challenge. Whether or not you agree with my arguments, to me they do not seem like such a stretch.
In one of the best papers of the year, Anna Stansbury and Larry Summers present what is to me the best non-“Great Stagnation” story of what has gone wrong, and I have read many such accounts. Here is their abstract:
Rising profitability and market valuations of US businesses, sluggish wage growth and a declining labor share of income, and reduced unemployment and inflation, have defined the macroeconomic environment of the last generation. This paper offers a unified explanation for these phenomena based on reduced worker power. Using individual, industry, and state-level data, we demonstrate that measures of reduced worker power are associated with lower wage levels, higher profit shares, and reductions in measures of the NAIRU. We argue that the declining worker power hypothesis is more compelling as an explanation for observed changes than increases in firms’ market power, both because it can simultaneously explain a falling labor share and a reduced NAIRU, and because it is more directly supported by the data.
There is a good deal of critical thinking about how different macroeconomic trends fit together, and a willingness to consider disconfirming evidence, so I do recommend you read through this one.
I have five main worries about the argument:
1. Rather than labor losing bargaining power, I think of the key development as “management measuring the marginal product of labor more precisely.” Admittedly that does lower the bargaining power of the majority of workers, given the 20/80 rule, or whatever you think the proper proportions are (Stansbury and Summers themselves presumably are underpaid, but in general wage dispersion has been going up in high-skilled sectors).
A minority of highly productive workers have much more bargaining power than they did before, which doesn’t quite fit the “lower bargaining power per se” hypothesis. And under my interpretation, easier unionization may not be much of a solution, since the problem here is the actual reality of who produces what. Consistent with my view, labor’s share is not really down if you consider the super-talented labor/owners/capitalists who start their own companies. That is a return to labor as well.
2. It is a noted advantage of the Stansbury and Summers approach that is explains the now-lower natural rate of unemployment. The puzzle, I think, is to explain both lower NAIRU and the slower labor market matching observed over the post-2009 labor market recovery. Their hypothesis seems to predict a higher degree of worker desperation, and thus quicker matches, than what we actually observed.
If you think, as I do, that employers are now better aware of the diversity of worker quality, and that only ex post do they learn that quality, employers will be more careful upfront, which probably does slow down matching speeds, thus fitting the data better.
3. If you play down market power, and postulate a fall in the share of labor, you might expect investment to be robust, but measured investment clocks in as mediocre. The authors discuss this point at length on pp.45-46 and offer multiple rebuttals, but I suppose I still think the first-order effect here ought to be stronger than what we (seem to) observe.
4. If corporate profits are so high, how is this consistent with the persistently low demand postulated by Summers’s “secular stagnation” hypothesis? The paper does consider this question very directly on p.56, but I genuinely (just as a matter of grammar) do not understand the answer the authors are suggesting. Here goes:
A fair question about the labor rents hypothesis regards what it says about the secular stagnation hypothesis that one of us has put forward (Summers 2013). We believe that the shift towards more corporate income,that occurs as labor rents decline,operates to raise saving and reduce demand. The impact on investment of reduced labor power seems to us ambiguous, with lower labor costs on the one hand encouraging expanded output and on the other encouraging more labor-intensive production, as discussed in Section V.So,decreases in labor power may operate to promote the reductions in demand and rising gap between private saving and investment that are defining features of secular stagnation.
I suppose I had thought of low rates of profit as a (though not the?) defining feature of secular stagnation, but again I may not have understood this passage correctly.
5. Matt Rognlie found that the decline in labor’s share went to housing and land ownership, not capital.
In any case, here is a whole paper full of economics, go and enjoy it.
Of course you should worry, not withstanding all of the dogmatism on Twitter and the pre-Lucasian framing of various charts and graphs.
Here is a simple way to look at it. Let’s say the Fed does the very best job possible with its monetary policy (and in my view the Fed has done a very good job so far). That would mean in terms of the loss function a Fed error in one direction would mean a too low rate of price inflation, and a Fed error in the other direction would mean a too high rate of price inflation.
Now, supply conditions have never been so volatile in my lifetime, and perhaps never in American history. We don’t know how the virus will spread, how reopenings will go, when a vaccine will arrive, how good the vaccine will be, how much a climate of fear will persist, and so on. Demand conditions in turn depend on how these supply conditions will evolve.
The Fed thus could make an error on either side of its target, through no procedural fault of its own. As a result, as a simple matter of logic, the rate of price inflation could be too high, or it also could be too low.
if you think you know the direction of the error in advance, you aren’t paying enough attention to the underlying unpredictable uncertainties.
And if your response is to cite old open letters to the WSJ and the like, that is the same dogmatic error that the inflation hawks from the 1970s have been making.
There are other, more substantive arguments why the rate of price inflation might end up too high (the fiscal side really matters!), but that is the simplest one and you won’t see it on Twitter. And it is fine to argue, by the way, as does Matt Yglesias, that you would rather see it too high than too low.
I was glad to see Martin Wolf tackle this whole question (FT) and not be too scared off by the yappers.
EF: You’ve looked at the question of how much peers matter. Many parents obviously seek schools where they believe their children will have higher-quality peers, whatever they may mean by that term. You and your co-authors have looked at Boston and New York City selective public schools, and you concluded that peer effects don’t seem to matter much. Why is that?
Angrist: I’m always beating that drum. I think people are easily fooled by peer effects. Parag, Atila Abdulkadiroglu, and I call it “the elite illusion.” We made that the title of a paper. I think it’s a pervasive phenomenon. You look at the Boston Latin School, or if you live in Northern Virginia, there’s Thomas Jefferson High School for Science and Technology. And in New York, you have Brooklyn Tech and Bronx Science and Stuyvesant.
And so people say, “Look at those awesome children, look how well they did.” Well, they wouldn’t get into the selective school if they weren’t awesome, but that’s distinct from the question of whether there’s a causal effect. When you actually drill down and do a credible comparison of students who are just above and just below the cutoff, you find out that elite performance is indeed illusory, an artifact of selection. The kids who go to those schools do well because they were already doing well when they got in, but there’s no peer effect from being exposed to higher-achieving peers.
We also have papers where we show that the elite illusion is not just a phenomenon relevant for marginal kids. This is in response to an objection that goes, “If you’re the last kid admitted to Stuyvesant, it’s not good for you because you’re not strong enough.” We can refute that with some of our research designs.
There are good stories and analyses throughout.
The more you are interested in test, track, and trace, the more you should favor at least partial liability waivers for business, at least that is how I see it. Here is an excerpt from a new paper by Daniel Jacob Hemel and Daniel B. Rodriguez:
Ex ante (before an exposure), the specter of liability generates incentives for businesses to take precautions that reduce the risk of virus transmission. Ex post (after an exposure), fear of liability may deter businesses from proactively informing customers and workers that they have been exposed to the virus through the business’s operations. The desire on the part of businesses to spare themselves from litigation may interfere with comprehensive contact-tracing efforts. To minimize the potentially perverse ex-post consequences of liability without sacrificing significant ex-ante benefits, the article proposes a limited safe harbor from liability for businesses that promptly contact customers and workers after learning about a possible exposure.
Again, here is my short liability study with Trace Mitchell of Mercatus.
That is the topic of my latest Bloomberg column, here is one excerpt:
The immediate future of my region thus appears to be a major demand shock to the stores, acceptable continuing employment for the upper middle class, and economic devastation for lower-income individuals. The traditional mix of government-connected employment and retail will swing heavily in the direction of government. In essence, the federal government will pay its employees to click on Amazon while working from home.
The ethnic dimension of Covid-19 in Fairfax County is especially noteworthy. Latinos make up 16.8% of the county’s population, but account for 62.7% of the diagnosed Covid-19 cases. And if you assume that perhaps lower-income Latinos are less willing or able to go to a doctor, the true percentage of the Latino cases may be higher yet.
I thus foresee a future where people are more reluctant to hire Latino immigrants for housework or for child care, and thus additional home responsibilities will fall on parents, probably disproportionately on women. In turn, I expect many Latinos to leave the area, at least temporarily, unable to afford the higher rents when there is little work. There may also be greater employer discrimination against Latino applicants, as unfair or unjust as that would be.
Those developments will lead to Fairfax County becoming whiter. (If you are wondering, blacks are a slightly lower Covid-19 case share in the county than population share).
Recommended, for all those who care.
Interesting throughout, here is the audio and transcript. Here is the summary:
Paul Romer makes his second appearance to discuss the failings of economics, how his mass testing plan for COVID-19 would work, what aspect of epidemiology concern him, how the FDA is slowing a better response, his ideas for reopening schools and Major League Baseball, where he agrees with Weyl’s test plan, why charter cities need a new name, what went wrong with Honduras, the development trajectory for sub-Saharan Africa, how he’d reform the World Bank, the underrated benefits of a culture of science, his heartening takeaway about human nature from his experience at Burning Man, and more.
I liked the parts about charter cities and the World Bank the best, here is one excerpt:
COWEN: How optimistic are you more generally about the developmental trajectory for sub-Saharan Africa?
ROMER: There’s a saying I picked up from Gordon Brown, that in establishing the rule of law, the first five centuries are always the hardest. I think some parts of this development process are just very slow. If you look around the world, all the efforts since World War II that’s gone into trying to build strong, effective states, to establish the rule of law in a functioning state, I think the external investments in building states have yielded very little.
So we need to think about ways to transfer the functioning of existing states rather than just build them from scratch in existing places. That’s a lot of the impetus behind this charter cities idea. It’s both — you select people coming in who have a particular set of norms that then become the dominant norms in this new place, but you also protect those norms by certain kinds of administrative structures, state functions that reinforce them.
COWEN: If you could reform the World Bank, what would you do?
ROMER: Oh, that’s an interesting question. I think the Bank is trying to serve two missions, and it can’t do both. One is a diplomatic function, which I think is very important. The World Bank is a place where somebody who represents the government of China and somebody who represents the government of the United States sit in a conference room and argue, “Should we do A or B?” Not just argue, but discuss, negotiate. On a regular basis, they make decisions.
And it isn’t just China and the US. It’s a bunch of countries. I think it’s very good for personal relationships, for the careers of people who will go on to have other positions in these governments, to have that kind of experience of, basically, diplomatic negotiation over a bunch of relatively small items because it’s a confidence-building measure that makes it possible for countries to make bigger diplomatic decisions when they have to.
That, I think, is the value of the World Bank right now. The problem is that that diplomatic function is inconsistent with the function of being a provider of scientific insight. The scientific endeavor has to be committed to truth, no matter whose feathers get ruffled. There’s certain convenient fictions that are required for diplomacy to work. You start accepting convenient fictions in science, and science is just dead.
So the Bank’s got to decide: is it engaged in diplomacy or science? I think the diplomacy is its unique comparative advantage. Therefore, I think it’s got to get out of the scientific business. It should just outsource its research. It shouldn’t try and be a research organization, and it should just be transparent about what it can be good at and is good at.
And toward the end:
COWEN: Last question thread, what did you learn at Burning Man?
ROMER: Sometimes physical presence is necessary to appreciate something like scale. The scale of everything at Burning Man was just totally unexpected, a total surprise for me, even having looked at all of these pictures and so forth. That was one.
Another thing that really stood out, which is not exactly a surprise, but maybe it was the surprise in that group — if you ask, what do people do if you put them in a setting where there’s supposed to be no compensation, no quid pro quo, and you just give them a chance to be there for a week. What do they do?
For purposes of contrast, here is my first Conversation with Paul Romer.
I just finished watching one of Chess24.com’s Magnus Carlsen-affiliated rapid on-line chess tournaments, when today (a day later?) I see that another tournament has started. And with Magnus himself playing, as well as other world-class players. Note that Magnus both plays in these tournaments as the #1 attraction, and he owns an equity share in them, albeit with other investors.
So I’ve been trying to model the production of chess services in my mind.
I start with the point that viewers care much more about live, fresh games than games from a week ago. Many sports of course operate on this same basis.
The second point is that most chess players have a relatively low opportunity cost of time, Rogoff and Kasparov excepted, plus some chess players can substitute into poker for profit (and may have quit chess already). In fact what they do in their spare time is to…play chess! Often with each other, and often on-line. So if you offer to pay them some amount for doing basically the same, they will sign up. Especially during a pandemic when many of them are trapped under relatively severe quarantines.
It is also the case that a chess player can play many days in the year, perhaps not every day, but you really can play a lot without tearing your rotator cuff.
It then seems the equilibrium is a much higher supply of chess tournaments, especially since on-line play removes some of the previous barriers to entry, such as needing a venue and some physical infrastructure.
You might even end up with a kind of Malthusian equilibrium, where the supply keeps on expanding to meet a fairly low marginal cost.
But this is a “superstars” kind of competition, and so the returns will go to the scarce factor. That scarce factor is Carlsen himself, who garners far more attention than any other player. And as noted he is an equity holder in this venture and as a player he has been winning the #1 prize money. Over time, you might expect the returns of some of the other players — maybe in the top ten but not so famous or glamorous — to approach the Malthusian level. Perhaps much of the public doesn’t care if Magnus plays #9 or #16, who in any case are only a small number of rating points apart.
Notice how well Magnus Carlsen understands reputation and internet production. He keeps on posting “Banter Blitz” videos on YouTube, which show him playing speed chess on-line and commenting on the games as they proceed. He dramatically expanded the supply of chess tournaments, which he earns income from. He already was “the scarce factor,” and he has dramatically expanded the supply of attention aimed his way. He understands that successful internet production is frequent production.
On-line chess viewing is way up (NYT) with the pandemic, and also because of these efforts.
Do not underestimate Magnus Carlsen. He has been #1 in classical chess, rapid, and blitz, all at the same time. He is a huge YouTube star in chess. He has won a tournament about chess trivia, and he has been #1 in fantasy football for the whole world (not an easy feat).
And now he is bringing an economic revolution to chess, with himself as the #1 labor and equity earner at the same time.
That is the topic of my latest Bloomberg column, here is one excerpt:
Demand for in-restaurant dining is likely to fall as well, though estimates vary. Since the average small business carries less than a month’s worth of liquid reserves, and the wait for a vaccine is likely to be at least a year, many restaurants will simply be unable to survive the shrinking of the market.
I call these places ghost restaurants because they are still walking around, so to speak, visible to us and listed on Yelp, but not really alive and without much of a future.
In a few months’ time, a significant number of these ghost enterprises will be gone. My drive around Northern Virginia, rather than being rich with culinary choice, will soon become fairly desolate — and the overall economic landscape will indeed be much emptier.
What else in our current capital structure might qualify as “ghost”?
And while an all-but-certain death awaits some businesses, others can look forward to mere stagnation. If you are a 23-year-old entrepreneur, how easy will it be to build up the network of “soft ties” that will help you launch the next phase of your career?
As many marginal businesses are going under, it is quite possible that the public-health situation will improve. Civic spaces will repopulate as commercial ones depopulate, giving urban landscapes a confusing feel. And because there will be fewer businesses to choose from, it will be all the harder for those remaining to enforce social distancing.
Many Americans have been clamoring lately for more freedom, and those desires are understandable. But as they emerge from lockdown, they might well be disappointed to discover that, above all else, what people will be exercising is the freedom to go out of business.
If you start by using the word “ghost” (better than zombie, in this setting), don’t be surprised if the column turns out a bit gloomy!
One in four low-wage workers face marginal net tax rates above 70 percent, effectively locking them into poverty. Over half face remaining lifetime marginal net tax rates above 45 percent. The richest 1 percent also face a high median lifetime marginal tax rate – roughly 50 percent.
That is from a new NBER paper by David Altig, Alan J. Auerbach, Laurence J. Kotlikoff, Elias Ilin, and Victor Ye.
My last Bloomberg column was co-authored with Garry Kasparov, here is one excerpt:
Another positive sign for UBI is that most Americans seem keen to return to their workplaces. One fear has been that UBI would lead to a couch-potato culture, with people choosing to stay at home even when they’re finally able to leave. But blue-collar service workers are continuing to brave the front lines even when faced with reasonably high risks of infection. They are not trying to get fired so they can collect unemployment. White-collar workers, meanwhile, are feeling restless and unproductive. Working from home may become more common, but most people seem eager to get back to the office — especially if the alternative is a combination workplace/schoolhouse.
…the crisis is serving up a very different and inferior bargain than the one many original UBI supporters advocated. Institutionalizing emergency measures designed to respond to Covid-19 would be irresponsible. It would entrench UBI without the prerequisite productivity boom from artificial intelligence and automation. (For some time it appeared the opposite might happen — namely, an AI boom but no UBI.)
I can report that Garry was a real pleasure to work and co-author with. Here is my earlier Conversation with him.
Let’s say its 1990, and you are proposing an ambitious privatization plan to an Eastern bloc county, and your plan assumes that the enacting government is able to stay on a non-corrupt path the entire time.
While your plan probably is better than communism, it probably is not a very good plan. A better plan would take sustainability and political realities into account, and indeed many societies did come up with better plans, for instance the Poland plan was better than the Russia plan.
It would not do to announce “I am just an economist, I do not do politics.” In fact that attitude is fine, but if you hold it you should not be presenting plans to the central government or discussing your plan on TV. There are plenty of other useful things for you to do. Or the uni-disciplinary approach still might be a useful academic contribution, but still displaced and to be kept away from the hands of decision-makers.
Nor would it do to claim “I am just an economist. The politicians have to figure the rest out.” They cannot figure the rest out in most cases. Either stand by your proposed plan or don’t do it. It is indeed a proposal of some sort, even if you package it with some phony distancing language.
Instead, you should try to blend together the needed disciplines as best you can, consulting others when necessary, an offer the best plan you can, namely the best plan all things considered.
That might fill you with horror, but please recall from Tetlock that usually the generalists are the best predictors.
Ignoring other disciplines may be fine when there is no interaction. When estimating the effects of monetary policy, you probably can do that without calculating how many people that year will die of air pollution. But you probably should not ignore the effects of a major trade war, a budgetary crisis (“but I do monetary policy, not fiscal policy!”), or an asteroid hurtling toward the earth.
If that is too hard, it is fine to announce your final opinion as agnostic (and explain how you got there). You will note that when it comes to blending economics and epidemiology, my most fundamental opinion is an agnostic one.
This is all well-known, and it has been largely accepted for some time now.
If a public health person presents what is “only an estimate of public health and public health alone” to policymakers, I view it as like the economist in 1990 who won’t consider politics. Someone else should have the job. Right now public health, politics, and economics all interact to a significant extent.
And if you present only one of those disciplines to a policymaker, you will likely confuse and mislead that policymaker, because he/she cannot do the required backward unthreading of the advice into its uni-dimensional component. You have simply served up a biased model, and rather than trying to identify and explain the bias you are simply saying “ask someone else about the bias.”
If an economist claims he is only doing macroeconomics, and not epidemiology (as Paul Krugman has said a few times on Twitter), that is flat out wrong. All current macro models have epidemiology embedded in them, if only because the size of the negative productivity and negative demand shock depends all too critically on the course of the disease.
It is fine to be agnostic, preferably with structure to the opinion. It is wrong to hide behind the arbitrary division of a discipline or a field.
We need the best estimates possible, and presented to policymakers as such, and embodying the best of synthetic human knowledge. Of course that is hard. That is why we need the very best people to do it.
Addendum: You might try to defend a uni-disciplinary approach by arguing a decision-maker will mainly be fed other, biased uni-disciplinary approaches, and you have to get your discipline into the mix to avoid obliteration of its viewpoint. But let’s be clear what is going on here: you are deliberately manipulating with a deliberately non-truthy approach (I intend those words as a description, not a condemnation). If that’s what it is, I wish to describe it that way! I’ll also note I’ve never done that deliberately myself, and that is along many years of advising at a variety of levels. I’d rather give the best truthful account as I see it.